St. Cloud’s political fight over its municipal wireless network cuts to the heart of one of the core debates in the national broadband plan. Do we regard connectivity as a service on the same level as schools, sewage, and public transportation — where we expect the city to subsidize the service because it provides needed social benefits? Or do we insist that we only provide broadband where it can pay for itself on a going forward basis (after some initial stimulus money to get the network built and get the ball rolling)? There is no doubt that for a city of 30,000, a fair number of people use the St. Cloud wireless network (at least 8500 unique connections/month) and enough regard it as sufficiently important to lobby their city council to keep the network in the face of a financial shortfall. At the same time, no one argues with the fact that the network costs the city $30K/month and seems likely to do so for the foreseeable future.

So how do we measure waste or success? I’ve argued on more than one occasion that we should look on these networks as the equivalent of a public transportation system. They don’t compete with cabs or car sales despite the fact that many people rely on them to avoid driving. In fact, cabs and auto dealers benefit because public transportation systems because they keep traffic manageable. And, as the iPhone and other smartphones continue to increase the demand for spectrum for data traffic, licensed wireless operators like AT&T are finding it beneficial to encourage customers to use wifi hotspots and offload the traffic whereas previously carriers resisted letting customers use wifi at all.

We have until February to debate how we want to incorporate this into our national broadband plan. Broadband as utility — where we encourage local governments to offer services like St. Cloud for the positive externalities for everyone even if it requires continuing subsidy? Or does it only make sense to have municipal broadband where it can pay for itself? With the final decision on St. Cloud now due in January 2010 — a month before the National Broadband Plan — it will be very interesting to see what the citizens of St. Cloud and their local government decide.

Except they didn’t. Not exactly. Which is extremely important on the delicate question of FCC authority. Actually, the FCC invited three companies involved in a very high-level spat on an issue pending before the FCC in two proceedings to provide them with useful information on how the market actually works.

I know, I know, this is all boring legal stuff that folks who care just about outcomes hate with a passion — or think is just cheap legal handwaving. But these things matter, both as a matter of law and and as a matter of policy. The fact is that the FCC is very carefully not exercising authority over anyone. The companies don’t even need to respond. However, if they fail to respond, they invite the FCC (and the rest of us) to assume the worst. Because allowing industry folks to foreclose needed agency action by simply refusing to provide necessary information is a crappy outcome we’ve lived with for the last 8 years (longer, really). Far smarter to invite industry folks to respond to questions, but decide that at some point you need to move with the information you have. Heck, if the FCC pulls that trick only once, I bet we’ll see lots more folks with relevant information willing to come forward.

So while I expect lots of folks to yammer about FCC authority on August 21 when the answers are due, they’ll be barking up the wrong tree. Won’t stop ’em, of course. But for those who would like a sense of what is actually going on from a legal/regulatory authority angle —

This week, on “Five Minutes With Harold Feld,” I cover handset exclusivity, my iPhone envy, and the inevitable “I’m a Mac/I’m a PC” joke. Also, I want to point out the “schlumpy” is a fine look, thank you!

I’ve bumped into a series of issues related to publishing recently. I don’t know that they ever will or should combine to form a coherent idea, but it feels like I should record them as though in a design notebook…

Today, the FCC will most likely dismiss the the Skype Petition. I’ve already written why I think this is a phenomenally bad idea and, while I continue to respect Kevin Martin and understand why he is doing this, he is totally wrong here. Once again, those worried about “unintended consequences,” “first do no harm,” etc., etc. fail to appreciate that a refusal to take action and granting permission to carriers to control the sorts of devices, applications and therefore what innovation and what free speech, go on over their networks is as much an action as granting the Skype Petition. There is no evading responsibility or avoiding unforseen consequences.

Which brings me to the Petition for Rulemaking filed by the Rural Carriers Association (RCA) to prevent exclusive deals on equipment, aka “Skype Lite.” Mind you, the rural carriers opposed the Skype Petition as much as any other carrier, arguing that it would be awful for their limited capacity rural networks if they could not control what equipment attached to their networks and what applications ran on that equipment. Nevertheless, they too are unsatisified in a world where market size and raw capitalism dominate. So, without ever once raising the same arguments as Skype or referencing the Commission’s information policy statement, the rural carriers argue for what amounts to the same relief as Skype, only tailored differently. Rather than regulate all carriers to require open networks, they ask the Commission to limit the market power of the major carriers by prohibitting exclusives. Otherwise, they argu, rural America will never know the joy of the iPhone or any other significant innovation — since the major carriers will tie up the most valuable applications and equipment in exclusive deals.

Nor are the rural carriers alone in finding the world according to Coase and Friedman less than they desire. The Commission has before it a good handful of petitions from carriers asking for mandatory roaming reform, access charge reform, and other limits on the ability of the dominant, vertically integrated providers from exercising their market power. Of course, all of these carriers asking for regulatory intervention are simultaneously celebrating the dismissal of the Skype Petition, piously telling Skype and the rest of the non-carrier industry that they are a bunch of parasites and that if they want access to a network they need to get their own licenses and build one.

I do not write to underscore the hypocrisy of these contradictory positions. That would be a waste of bits. Companies make whatever arguments they need to make in order to survive and thrive. No, my warning to the rural carriers and the rest of the Skype-lite crowd is simply one of practicality. You cannot win your request for special regulation while simultaneously singing the praises of the fiercely competitive broadband market and arguing that there is no place for regulation in this great free market success story. By contrast, if you simply admit that the industry now suffers from excessive concentration and the cure for this requires a comprehensive approach, you will find yourselves much more likely to prevail.

Martin indicated that he would dismiss the Skype Petition “without prejudice,” meaning that Skype or others will be free to try again — say, in six months or so when the FCC changes hands. In the mean time, I suggest the rural carriers and the other industry players anxious for regulatory relief — whether in the form of spectrum caps in auctions, mandatory roaming, or access charge reform — rethink their strategy.

Or, to put it another way, “regulation, it’s not just for developers and other parasites any more.”

They pledge to make this available on the whole network. Not “just on a portion of the network, or a piece of spectrum that may become available after 2009.” For tech support, if you are a “bring your own device,” you can call VZ to make sure your device is connected but you are otherwise on your own.

Verizon says they are doing this in response to market demand. Rumors that this is an effort to head off regulation or declares an interest in C Block are baseless speculations of undisciplined internet bloggers like yr hmbl obdn’t. But they do stress several times on this press call that this is all about the market working, just as terminating early termination fees had nothing to do with regulatory pressure, so there is obviously no need to regulate.

Why? See below . . . .

Damn, I thought I had found a Christmas gift for my wife that was not a gadget. You may love a gadget. You may tell your friends. You may keep using it for a year. Or not. But to me, a gadget is defined as something you don’t immediately replace when it’s lost. Gadgets aren’t game-changers that permanently alter how you live.

One of the points at issue is whether computer screens and iPhone screens also count as “screens”, that is, the writers want compensation for works of theirs that are distributed on the net, and, as I understand things, the other party doesn’t want to give it to them.

As a person who has made his living as a writer, kinda-sorta, since April, 1980, I find the notion of a writer’s union intriguing and somewhat baffling. It’s hard to imagine a technical writer’s union negotiating terms with Sun, Microsoft, or IBM. But why is that, exactly? Screenwriting is a much more solitary endeavor than technical writing, so on the face of it, one would expect screenwriters to be even less likely to unionize than technical writers. But then again, the stakes are higher in Hollywood, where the difference between an OK screenplay and a good screenplay is measured in millions of dollars at the so-called bottom line. So writers have more clout, is what I’m trying to say.

Recently my friend the Hollywood actor/producer/script-doctor has been making some noises about pimping the movie rights to my novel Acts of the Apostles. (It would make a great movie, by the way!) I have no understanding of the craft of screenwriting; nor do I have any free time not taken up by the day job & so-called life. So I’m not a very strong candidate to try my hand at writing a screenplay of my book. On the other hand, I’m not in the Guild, and, given that it is a guild— meaning that it’s hard to even gain admission to it— I’m unlikely to be in it anytime soon. So maybe I should go for it.